Business Brokers BC Blog

Vancouver Business Brokers are a fairly recent phenomenon in British Columbia and even Canada in fact.  In the past when people wanted to sell their businesses they either did it themselves or looked to their accountants or friends for advice.  This changed as business owners began to appreciate the complexity of the issues involved, the associated liabilities, and the time it takes owners away from running the business - or sometimes very insincere buyers, who are only digging for information to get ideas to help their own business.  The large accounting firms, divisions within investment banks and specialized Mergers and Acquisitions firms are still very much involved in buying and selling businesses but they tend to focus on larger transactions as these generate larger fees.  Very few firms either pay attention or specialize in the transactions under $2,000,000…but this is the bread and butter sector of the market that business brokers deal in.  Business brokerage really started in a big way in the 1970’s in the United States and the first firms started up in Canada a few years later.

What makes a good Business Broker?  We really see our role as fourfold.  The first hat we wear is our “accountant’s” hat - every business must be understood, evaluated and priced in the context of prevailing market conditions.  The second role we play is as “salesmen” where we strive to create interest in our client companies (in a confidential way) and to let the market and synergistic know that a good profitable company is now up for sale.  The third hat is the “negotiator” wherein we bring two parties to an agreement relating to the transfer of ownership, financing and transition terms.  The final element is to be “intermediaries” ensuring that the transaction comes to a successful conclusion and managing the outside advisors that typically get involved at this stage.

I think the attributes that make a broker “good” are an understanding of the client’s personalities (both buyer and seller), creativity, intellect and forthrightness.  On a practical level a broker must also be licensed and qualified.  In the province of British Columbia an individual must be licensed under the Real Estate Act in order to buy and sell businesses on behalf of other individuals.  Often you will find real estate agents that normally specialize in selling residential homes will take on a listing for a business for sale.  This can be asking for trouble as it is outside of their realm of normal practice and they may not be qualified or capable of properly handling the transaction.  Pick a professional that focuses on selling businesses.  Every broker at our firm, for example, is a qualified realtor and is committed to ongoing educational courses put on by industry associations (like the International Business Brokers Association -  http://www.ibba.org/).  Finally, when looking for a broker to act on your behalf check out what their reputation is like.  Try and make sure you are dealing with someone who has high ethical standards.

This entry was posted on Sunday, June 28th, 2009 at 6:20 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.